PAPUA NEW GUINEA

Papua
New Guinea's (PNG) prime
minister, Julius Chan, has
thrown Australian mining
companies off guard with an
announcement on new
resource project regulations.
Under the new rules, future
projects will have to make a
"free" share available to local
landowners. "In mining
developments ... a 5 per cent
share of the government's 30
per cent will be given free to
the landowners, and paid for
by everybody, that is, the
consortium of developers,"
asserted Chan, who also
hiked the royalty rate on
resource projects from 1.25
per cent to 2 per cent.

Mining companies began
carping within hours of the
announcement. "The increase to 2 per cent (in the royalty rate) ... is regarded as
excessive and invidious,"
said Lawrie Reinertson,
managing director of Placer
Pacific, a us company that
manages a gold mine on
Misima Island, east of mainland PNG.